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All zero rating services are terrible – A look at T-Mobile’s plans and parallels in India


save the internet

This week, the Wall Street Journal reported that YouTube has taken serious objections to T-Mobile’s zero rating platform Binge On for videos. T-Mobile, a mobile operator in the US, had been reducing video quality on YouTube to 480p in order to reduce data usage on its networks.

“Reducing data charges can be good for users, but it doesn’t justify throttling all video services, especially without explicit user consent,” a YouTube spokesperson said in the Wall Street Journal.

Last month, T-Mobile introduced its zero rating platform for video sites as they use a lot of T-Mobile’s bandwidth. Netflix, Hulu and HBO signed on the platform where these sites could stream without any data caps or throttling. YouTube chose not to be part of the programme. The United States Federal Communications Commission (FCC) met with officials from T-Mobile as part of its inquiry into net neutrality and is also looking at similar practices by Comcast and AT&T.

What is interesting is that the Internet Association, which counts Facebook, Google, Amazon and Yahoo among others as members, is also critical of throttling on Binge On and has issued a statement against the practice.

Reducing data charges for entire classes of applications can be legitimate and benefit consumers, so long as clear notice and choice is provided to service providers and consumers. However, a reasonably designed zero-rating program does not include the throttling of traffic for services or consumers that do not participate.

Parallels in India

It is ironic that Facebook is part of an association in the United States which is opposed to a zero rating service, while at the same time it is pushing really hard for Free Basics in India.

But consider this, in emerging markets such as India, where customers are very cost conscious, giving access to these sites, Facebook and Reliance Communications are ensuring that consumption for some portals become free, and some remain paid. This puts RCOM and Facebook in a situation where they are king-makers in particular, and can effectively extract a payment for ensuring that some sites dominate others.

It was why Times Internet and its affiliate publications has said that it will remain on board Free Basics as long as their competitors are also there. If one competitor chooses to come on board, there will be little choice but to also follow, else lose out on a potentially large user base. This gives Facebook access to data from across websites.

YouTube is now finding itself on the similar situation. It will be missing out on users who would find a bad viewing experience on T-Mobile.

Remember, telecom operators typically pay for data when Free Basics gets used, and that money might end up being paid for by users of the open web. The cost differential discourages users to move to the open web, as would a warning that would pop up, informing users that they’re being charged. This would be against the philanthropic ideals Facebook has set itself up for bringing more users to the Internet. Indeed, last time we checked, only 20% of 800,000 users who signed up of Internet.org were first time users.

More neutral ways to provide Internet

There are a number of neutral ways to bring more Internet users which Facebook chooses to ignore. Mozilla’s Mitchell Baker has pointed out alternatives:

– subsidising Internet access for users by showing them advertisements
– companies offering free data in the form of coupons, on the basis of the usage of their website
– donation of money to subsidise Internet access for the poor
– and instances of citizens with expensive data plans being charged a nominal fee which can be used to subsidise Internet access for the poor.

Mozilla and Orange have experimented with data bundled with handsets in Africa, and in Bangladesh, Grameenphone, along with Mozilla, allows users to get data if they watch ads.

Disclosure: MediaNama has taken a strong position in favor of Net Neutrality and against price discrimination.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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